The People’s Pension, Crawley, England, is expecting more from its asset managers when it comes to responsible investment.

The £26 billion ($32 billion) multiemployer defined contribution plan said in an April 29 statement on its new responsible investment policy that at a minimum, fund managers are expected to have a commitment to net zero and adequate resources committed to stewardship. Failing to do so could trigger a review and possible transfer of assets to other managers, the U.K. master trust said.

Climate change, nature and human rights are the three stewardship priorities going forward, with more scrutiny of managers’ stewardship practices. “Gone are the days of ‘tea and cake’ engagement — what we want from our fund managers is evidence of a targeted approach to engagement, routed in a robust theory of change to achieve maximum impact,” said Leanne Clements, head of responsible investment at People’s Pension, in a statement about the new policy. “We want to see evidence that limited stewardship resources are being employed in the most effective way possible, and that fund managers execute robust voting-escalation strategies.”

Managers will be expected to support emissions reduction targets that include net-zero greenhouse gas emissions by 2050, halving them by 2030 for growth assets and a 30% reduction by 2025 for developed markets equity.

On March 5, The People’s Pension announced it was shifting £15 billion in assets to climate-aware investment strategies aligned to the Paris Agreement. That change represents 70% of a main investment fund investing up to 85% of assets in equities. Investment in companies is based on their exposure to climate risks and opportunities, and tracks regional indexes aimed at exceeding the minimum standards of the European Union’s Climate Transition Benchmarks Regulation.

The new policy includes net-zero voting guidelines for fund managers to implement, with triggers for voting against company directors in sectors reliant on fossil fuels or related to deforestation.

The voting guidelines are aimed at achieving the maximum potential for impact, and driving better investment outcomes for participants, “which is why the requirements we have of fund managers are so robust,” said Mark Condron, chairman of the board of trustees, in the statement. “Our stewardship objective is to encourage investee companies to behave in more responsible and sustainable ways.”

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